Qatar is not doing enough to combat cryptocurrency money laundering, says watchdog

This article briefly:

· FTAF criticizes Qatar for poor response to money laundering and terrorism financing.

· Few money laundering convictions and inconsistencies in Qatar's risk profile.

· Despite the ban on cryptocurrencies, enforcement action is considered insufficient.

The Financial Action Task Force (FTAF) has criticized Qatar for its poor response to cryptocurrency money laundering and terrorism financing. Despite banning virtual asset providers and cryptocurrency exchanges, Qatar has not effectively enforced the ban.

The Financial Action Task Force (FTAF) has condemned Qatar for its money laundering practices. A report by the group said the country needed to make "significant improvements" in tackling terrorism financing.

Crypto money laundering conviction in Qatar

FATF is an international regulator based in Paris that sets global standards for combating money laundering and terrorist financing. The group's report noted that while the country's financial intelligence unit was "well equipped", its "sophisticated analytical capabilities" were underutilized.

“Qatar has only a small number of terrorist financing convictions and prosecutions. There is a major inconsistency between Qatar’s risk profile and the type and extent of terrorist financing activities that have been prosecuted and convicted.”

Qatar banned cryptocurrencies in 2019. Still, FATF says implementation is not enough.

The group concluded that Qatar “has not demonstrated that the competent authorities have proactively identified and taken enforcement action against possible violations of this prohibition.” However, it did admit that between 2020 and June 2022, 2007 transactions were rejected, 43 accounts were closed.

Cryptocurrency banned in 2019

In response to the FTAF report, Martin Cheek, managing director of digital compliance firm SmartSearch, told reporters:

“Qatar has rightfully won praise for its progress in anti-money laundering (AML) measures. However, while technically demonstrating a high level of compliance with FATF requirements, there is still work to be done in strengthening its AML framework. Without a robust digital compliance structure, any business can become a vehicle for money laundering and provide cover for some of the world's worst crimes."

He continued:

“While Qatar has implemented a risk-based approach to assessing money laundering and terrorist financing, understanding of the complex forms of these crimes needs improvement and the implementation of digital compliance will further strengthen Qatar’s overall AML framework”

Despite a ban on cryptocurrencies and other digital assets, Singapore-based cryptocurrency exchange Crypto.com is an official sponsor of the 2022 FIFA World Cup. However, attendees can use the BitPay card, a crypto debit card, to make purchases.

Global Crypto Regulation. Source: Statista

As the use of digital assets increases, so do concerns about money laundering. Just this week, the EU launched new consultations on fighting crime. Globally, law enforcement agencies are hiring more on-chain analysts to detect illicit capital flows.